Allen & Overy (A&O) has advised African Frontier Capital (Mauritius) LLC (AFC) on a USD 65 million receivables financing transaction which will enable the provision of loans to people living off-grid in Kenya to buy d.light solar home systems and related solar products. Recognising the positive impact that the provision of affordable and sustainable solar energy products has on communities and quality of life, A&O delivered a proportion of its work on the transaction on a pro bono basis.
A&O advised AFC as to matters of English law and New York law and, more generally, as lead counsel on the transaction.
Under the transaction, Brighter Life Kenya 1 Limited (BLK1), a newly incorporated company and an indirect subsidiary of AFC, will receive one or more loans from U.S. International Development Finance Corporation (DFC) as senior lender. The loans from DFC will be secured by receivables derived from consumer finance agreements between the Kenyan subsidiary of d.light (d.light Kenya), who provide solar home systems and related solar products to consumers, and their customers.
The consumer loans to d.light’s customers are repaid through their mobile phone payments, and those payments are ultimately used to repay DFC.
By providing d.light with flexible working capital to finance its continued growth, BLK1 is expected to finance the provision of improved energy access to over a million people in Kenya and is intended to be the first in a series of vehicles established to provide d.light with continuing access to receivables financing.
Angela Clist, Partner at Allen & Overy commented: “We are happy we were able to assist on this receivables financing transaction for AFC that is expected to facilitate the provision of solar home systems and related solar products to d.light’s customers in Kenya. It is hoped that this will help to sustain the off-grid energy industry in Kenya. The success of this transaction is down to the international expertise we have at Allen & Overy.”
Alex Moezi, Counsel at Allen & Overy added : “This cross-border receivables financing transaction involves English, Kenyan, New York and Jersey laws with novel characteristics such as the payment of electronic money by Kenyan consumers through their mobile phone handsets. Pro bono and community investment work has been at the heart of our business for decades and the prospect of collaborating with AFC, DFC and d.light to improve many lives in Kenya has been an additional source of motivation to the Allen & Overy team.”
Leading on advising AFC on the deal were partner Angela Clist and counsel Alex Moezi, assisted by partners Richard Tredgett (London) and John Hwang (New York). Also advising were Carlos Cabrera (Peerpoint Consultant), Leah Morgan (Associate), Simon Nikolov (Associate), Daniel Smith (Senior Associate), Derek Poon (Associate) and Josh Kopel (Associate).
Allen & Overy were supported by Kaplan & Stratton, Advocates Kenya as to matters of Kenyan law and Walkers (Jersey) LLP as to matters of Jersey law.
